Chapter XXI - Penalties
Section 461
Section 461: penalty for failure to furnish statements, etc.
Section 461 penalises a person who is required to deliver (or cause to be delivered) the statement prescribed in section 397(3)(b) - broadly, the TDS/TCS statement - if they either fail to file it on time or file it with incorrect information. It also provides a specific carve-out that spares a short, cured delay from penalty.
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Need advice on Section 461?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Where a person, who is required to deliver or causes to be delivered a statement prescribed in section 397(3)(b),—
(a) fails to do so within the time prescribed in the said section; or
(b) furnishes incorrect information in the said statement,
the Assessing Officer may impose on such person, a penalty of a sum which shall not be less than ₹10000 but which may extend to ₹100000.
(2) No penalty shall be levied under sub-section (1)(a) for delay in filing or non-filing of statement referred therein, if the person proves that—
(a) tax deducted or collected along with the fee and interest, if any, was paid to the credit of the Central Government; and
(b) the said statement was also delivered or cause to be delivered before the expiry of one month from the time prescribed in section 397(3)(b).
Introduction
Section 461 concerns a statement prescribed by section 397(3)(b) that is filed late, not filed, or contains incorrect information. The possible penalty ranges from ₹10,000 to ₹1,00,000, with a narrow statutory protection for certain short delays after tax, fees and interest are paid.
Key takeaways
Two failure types
Late or missing statements and incorrect information are both addressed.
Penalty range
The Assessing Officer may impose between ₹10,000 and ₹1,00,000.
Short-delay exception
The subsection (1)(a) delay penalty is not levied when the specified payments were made and the statement was delivered within one month of the prescribed time.
The penalty for late filing or incorrect information
Sub-section (1): where a person required to deliver, or cause to be delivered, the statement prescribed in section 397(3)(b) either (a) fails to do so within the prescribed time, or (b) furnishes incorrect information in that statement, the Assessing Officer may impose a penalty of not less than ₹10,000, which may extend up to ₹1,00,000.
When the penalty for late filing does not apply
Sub-section (2): no penalty is levied under sub-section (1)(a) for a delay in filing, or non-filing, of the statement, if the person proves that: (a) the tax deducted or collected, along with any applicable fee and interest, was paid to the credit of the Central Government; and (b) the statement was delivered (or caused to be delivered) before the expiry of one month from the time prescribed in section 397(3)(b).
Applying Section 461 in practice
Penalty and safe condition. Late/non-delivery or incorrect information in the section 397(3)(b) statement may attract a penalty between ₹10,000 and ₹1 lakh. For delay or non-filing only, subsection (2) prevents penalty if the tax, fee and interest have been paid and the statement is delivered within one month after the prescribed time. That exception does not automatically excuse incorrect information under subsection (1)(b). Checklist: tax deposit, fee/interest, original deadline, filing date, corrected details and proof. Section 427's late fee and section 470 reasonable cause need separate treatment.
Step-by-step flow for applying Section 461
- 1
Is the person required to deliver, or cause to be delivered, the statement prescribed in section 397(3)(b)?
- No: Section 461 does not apply.
- Yes: Go to the next step.
- 2
What is the failure?
Section 461(1) covers two failures: (a) not delivering the statement within the time prescribed in section 397(3)(b), and (b) furnishing incorrect information in it.
- Incorrect information only (clause (b)): The Section 461(2) relief does not cover clause (b); skip to the last step.
- Delay or non-filing (clause (a)): Go to the next step.
- 3
Was the tax deducted or collected, with any fee and interest, paid to the credit of the Central Government?
This is the first condition in Section 461(2)(a). The person must prove it.
- No: The relief is not available; go to the last step.
- Yes: Go to the next step.
- 4
Was the statement delivered before one month expired from the time prescribed in section 397(3)(b)?
This is the second condition in Section 461(2)(b). Both conditions must be proved.
- Yes: No penalty is levied under Section 461(1)(a).
- No: Go to the next step.
- 5
Penalty that the Assessing Officer may impose
The Assessing Officer may impose a penalty of not less than ₹10,000 and up to ₹1,00,000. The word "may" leaves the levy to the officer. Check Section 470 (reasonable cause) separately, since Section 461 is listed in it.
Practical checklist
Do
- Keep the statement due date, filing acknowledgement and tax, fee and interest challans.
- For a delay case, separately test both statutory conditions for the one-month protection.
Avoid
- Do not assume the short-delay protection excuses incorrect information under subsection (1)(b).
Illustrative example
Worked example: a short delay that is cured
Hypothetical facts (illustration only, not a real taxpayer): A company must deliver the statement prescribed in section 397(3)(b) for a period. It deposited all tax deducted for that period on time, and has paid any fee and interest due. It delivers the statement 20 days after the prescribed time. A month later it finds that one deductee's details in the statement were wrong. All dates and facts are assumed.
Identify the failures
There are two separate matters: a delay (Section 461(1)(a)) and incorrect information (Section 461(1)(b)).
Test the delay relief
Tax was paid to the credit of the Central Government, and the statement was delivered 20 days late, which is before one month expired from the prescribed time. If the company can prove both facts, Section 461(2) bars the penalty for the delay.
Test the incorrect information
Section 461(2) applies only to clause (a). The wrong deductee details fall under clause (b), so the Assessing Officer may still impose a penalty between ₹10,000 and ₹1,00,000.
Reasonable cause
Section 470 lists Section 461. If the company can prove a reasonable cause for the error, no penalty is imposed for it.
Outcome
- No penalty for the 20-day delay, if both Section 461(2) conditions are proved.
- The incorrect information remains exposed to a penalty of ₹10,000 to ₹1,00,000, subject to Section 470.
Frequently asked questions
What is the penalty range under Section 461?
Not less than ₹10,000 and up to ₹1,00,000, imposed by the Assessing Officer for failing to file the section 397(3)(b) statement on time, or for furnishing incorrect information in it.
Is there any relief for a short delay in filing?
Yes - section 461(2) exempts a delay in filing from penalty under sub-section (1)(a), if the tax deducted/collected along with fee and interest was paid to the Central Government's credit, and the statement was delivered within one month of the prescribed time.
Does the relief in Section 461(2) also cover furnishing incorrect information?
No - the carve-out in sub-section (2) is limited to the delay/non-filing penalty under sub-section (1)(a); it does not cover the penalty for furnishing incorrect information under sub-section (1)(b).
Need help applying this provision to your situation?
Get help filing your TDS/TCS statements on timeLast updated 2026-10-10